European Electricity Market Reforms: The "Visible Hand" of Public Coordination

Dominique Finon and Fabien Roques ()
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Dominique Finon: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique

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Abstract: The paper investigates how proposed reforms on policies to maintain generation adequacy and to encourage clean technology investments in a number of European countries, modify the role of the market. This is reduced as the government, regulator and system operator take on explicit responsibility through the introduction of capacity mechanisms and long-term support for clean technologies. We highlight the interaction of these mechanisms with the electricity market and we look at how they reallocate risks between generators, government and consumers. The different mechanisms offer varying degrees of autonomy to generators with regards investment decisions. Looking towards the future, the paper also explores how designs of mechanisms might move towards a technology-neutral mechanism in the long-run. This could involve the auctioning of long-term contracts for all types of existing and new capacities, whether it be low carbon or fossil fuelled.

Keywords: Capacity mechanism; renewables policies; long-term contracts; electricity markets (search for similar items in EconPapers)
Date: 2013-04
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Citations: View citations in EconPapers (9)

Published in Economics of Energy & Environmental Policy, 2013, 2 (2), pp.107-124. ⟨10.5547/2160-5890.2.2.6⟩

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Journal Article: European Electricity Market Reforms: The "Visible Hand" of Public Coordination (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00984254

DOI: 10.5547/2160-5890.2.2.6

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